All human beings live through a lifecycle – we are born, grow slowly to maturity, spend a long time as mature adults, then grow old, and die. During the early years, we consume goods and services that we do not produce. During the long middle years, we produce more than we consume, and in old age either we cease producing once more or else produce at a low level.
In human beings, it is the women who have the children. The
men provide the sperm, talk trash, and puff their egos. There are obviously
three possibilities. If on average each woman has two children (actually 2.01
children, but never mind), then the population will over the generations
reproduce itself at a stable level. If each woman on average produces more than
two children then the population will grow. If each woman on average produces
fewer than two children then the population will shrink. These are not cultural
facts or ideological musings or historical conjunctions, they are just biology
and arithmetic.
A little while ago, I referenced a startling New York Times
story which noted that because in China women produce on average roughly only 1.7
children, the enormous Chinese population of 1.4 billion souls is on track to
shrink by the end of the 21st century to roughly 740 million. Notice
by the way that 740 million is not some kind of point of stability. If the
fertility rate in China remains 1.7, the population will continue to shrink as
the decades go by. Indeed, bizarre though it may seem, other things being left
to one side (more of this in a moment) a country with a 1.7 fertility rate will
eventually cease to exist. Think about it. When the last 20 people – 10 women
and 10 men – occupy what was once a country of 1.4 billion, if those 10 women
have a fertility rate of 1.7 then in the next generation there will only be 17
Chinese. In the next generation that number
will drop to 15, and so on until the last child buries his or her parents and
wanders off into the sunset.
The population of the United States has been growing pretty
steadily since I was born (and also, of course, before I was born.) But the
fertility rate has been falling. In
1958, the fertility rate was 3.582. By 1972, it had fallen to 2.132, just
barely replacement level. Currently, I was startled to discover when I went
searching the web, the US fertility rate is 1.781, just slightly above
that of China.
It is interesting to break out the US figures by race and
ethnicity. White Americans have a fertility rate of 1.601, markedly below that
of the Chinese. Black Americans are
doing rather better with a fertility rate of 1.775, still well below
replacement. The Hispanic rate is 1.94, close but no cigar. Asian Americans are
at 1.51.
Children consume without producing, just as old people
produce without consuming, but generally speaking in modern society children consume
less per capita than old people so an aging shrinking population can put a
severe strain on an economy. What to do?
Assuming that modern science will not figure out a way to
get men pregnant, and in the face of what seems to be a broad international
tendency for women to have fewer children, the only answer, at least in the
short run, is for a country like the United States to get people to move
here, especially young people of childbearing age.
In short, immigration is not the problem, it is the
solution.
18 comments:
Why don't people immigrate to China?
Also, as the Chinese population ages it puts an increasingly burden on those still working. Fewer workers supporting more of the retired. At what point will that break the social contract in China and become unsupportable?
I'm not convinced that shrinking and/or aging populations necessarily pose the severe economic problems that some suggest. Some of the reasons for this skepticism are stated by John Quiggin at the blog Crooked Timber here:
link
Moreover, from the standpoint of, e.g., environmental degradation and quality of life generally, the fact that the earth's population is projected to level off eventually (after rising) and return roughly to its current level of 8 billion by 2100 (according to what Quiggin says at the end of the linked post) is not at all a bad thing, I would suggest.
It seems to me like fearing the economic impacts of a shrinking population entails utter pessimism about the possibility of socialism. If a socialist society is one where we don't allow people to live on the condition that they're a productive member of society, but rather one where we simply let people live, then there will be lots of people who consume while only producing luxury goods if anything at all. We'd have lots of artists and philosophers and far fewer industrial workers and office workers. But, we optimistically assert, the productive capacity of the economy will be so huge that it's no problem. We can support a large, unproductive population because automation and what have you have made our factories so productive that we don't need everyone to work. You might even think that's the position we're in now. We produce way more than we need, enormous amounts of food go to waste, last season's fashions get thrown in the landfills, and so on. But if it's the case that we don't need to have some existential dread over taking poverty's sword of Damocles out from over worker's heads, then we also don't need to have any existential dread over the population aging and all those old people consuming without producing. We produce plenty!
"Children consume without producing, just as old people produce without consuming"
Didn't you mean that both children and the elderly consume without producing, at least in societies where child labour is for the most part abolished and where the elderly for the most part have some sort of pension?
But maybe these, too, will come to seem like distant memories in an almost forgotten "golden era"? Then we'll, after a generation or so, get back to people having large numbers of children in order to construct some kind of safety net for their old age?
I also have to confess that 7 or 8 billion people still strikes me to be an ongoing recipe for planetary disaster
Yes of course that is what I meant. Sorry.
"In short, immigration is not the problem, it is the solution." One of the solutions, and only for a single country. If all countries have fertility rates < 2.01, ... well, "robbing Peter to pay Paul" comes to mind. Productivity growth, so that each individual worker can support more non-workers, is another solution.
marcel proust says that productivity growth is a solution (assuming for the sake of argument that there's a problem, in anything except the very long term).
Let's say X is an insurance agent. Instead of processing two insurance claims or applications in an hour, X starts to do three in an hour. X's productivity has increased, and so, presumably, has GDP.
How does this translate in concrete terms into the economy bring able to support more "unproductive" persons, many of whom, if they're past retirement age, will have Social Security, pensions, and/or in some cases their own savings?
An increase in GDP via an increase in productivity doesn't necessarily do much of anything, istm, to bolster the solvency of social security, pensions or the equivalent. So again, how does it translate into the economy being able to support more "non-workers"? It doesn't even nec. lead to more tax revenue, given the byzantine tax code and for ex. the fact that v. large companies, up until now (though there have been some potentially promising moves in the G-7 on this front recently), have often by various maneuvers avoided paying much in taxes at all.
LFC, your insurance agent has managed to up his product output by 50%. What that means is that whereas before it took 3 agents an hour to process 6 claims, now it just takes 2 agents and there is a former agent that is now free to do some other actually socially productive work while all the claims society needed to be denied still get denied- but more efficiently denied. Maybe the other one becomes a school teacher or a nurse. This argument is much easier to make when you start with workers who are unarguably producing vital commodities like food- it is generally understood that it takes far, far fewer labor hours to produce food than it did 150 years ago and that the US does not need 90% of its labor force engaged in producing food anymore.
Sometimes you have to look at the real resources involved in producing goods rather than the financial side.
I guess that goes part of the way toward an answer at least, and I'll mull it over. As Quiggin argues, though, in the post I linked, the economic model underlying what he calls the NYT's pro-natalist articles may just not be valid. I have to sign off for a while.
WTF?
Why is "Caillo Lisa's" post still up?
We frequently get "the crazy" here, but there have to be some limits on "THE CRAZY".
That account appears to have spammed every post going back to late January (here is the oldest one I saw). Hopefully an easy fix!
would you be willing to explain, to a thick reader, the 'arithmetic and biology' that yields the 2.01 figure? :)
Anonymous at 12:36,
I assume what Prof. Wolff meant was that if 2 parents had 2 children and those children grew up to adulthood, the population would be stable. 2 people made 2 people who will then make 2 people and so on. But, unfortunately, not all children grow to adulthood, so sometimes a family would need to have more than 2 children to ensure that for every 2 parents, there are 2 children to replace them. Of course this is all on average, so not everyone needs to have children for the 2.01 figure to hold, some families will have 10 children and some people will have no children, but if it averages out to 2.01 children per family, then the population would be stable.
"Why don't people immigrate to China?"
Much of China is uninhabitable or only capable of supporting a very low density population not to mention a tonal language and the swing between a politics that swings from authoritarianism to Stalinism every few decades.
When the glaciers around the Tibetan Plateau that feed all those Asian rivers recede due to global warming we will have four nuclear states with too many people and not enough water and one with a lot of land and water.
In the twentieth century we violated the Rule of 72 (most of Africa is still doing so) and we now need to deal with the result.
If the insurance agency is processing more applications, it's making more money which can then be taxed, ditto all enterprises.
Dear Prof. Wolff
Thank you for your wonderful posts, which I avidly read without commenting so far.
You write ""Children consume without producing, just as old people produce without consuming".
One could claim that children produce parents and grandparents and old people produce grandchildren, that is both children and old people (re)produce social relations, which are arguably more important than material goods.
Warm regards
Yola Georgiadou
Here’s an ‘Off-the-top- of my head’ idea. Early 20th century thinkers such as JM Keynes and Bertrand Russell thought and/or hoped that as human productivity increased, people would be content with a moderate but adequate level of material goods and would devote a lot less time to productive labour and lot more to leisure and to cultural pursuits . (Their conception of cultural pursuits was perhaps a little on the elitist side but they would probably have been willing to include such hobbies as gardening under ‘cultural pursuits’ if they had been pressed.) Indeed Keynes seems to have thought that the *point *of economics as a practical science was to encourage those economic policies that would provide everyone with the wherewithal to lead a relatively unlaborious life and to enjoy the riches of high culture. Now, it is widely suggested that these predictions and/or hopes have not been realized. *During the main part of our working lives*, we beaver away accumulating goods rather than resting content with a material modicum and using our extended leisure both to cultivate and to smell the roses. . And a big question in political economy is ‘Why do we collectively behave in what Keynes and Russell would have regarded as a silly way?’. (Perhaps the question should be “Why do we have an economic system which incentivizes such behaviour and how does it work?’) There is too much work and not enough play, making many Jills and Jacks both dull and unhappy girls and boys . But perhaps that is the wrong way to look at things. We *do*rest content with a material modicum and devote a lot of our lives to leisurely pursuits but *only after we have retired* . If somebody retires as 65 and lives to 85, (but in reasonable health) then they will have been doing the Keynsian thing for 30% of their adult lives (assuming adulthood to start at twenty). Indeed we may be living *relatively* leisured and unlaborious lives if you consider our adult lives *as a whole*. Assume a forty hour working week and a waking life of 16 hours a day. That’s 112 waking hours per week of which 40 (that is nearly 36%) are devoted to labour. Perhaps we should add in a further ten hours for work prep of various kinds including commuting. Then the working time per week for any average person will be 50 hours, that is a bit under 47% of their waking life for that week. .To make calculations easier, let’s bump it up to 50%, that is 56 hours out 112. Assume that people work for 48 out of a possible 52 weeks per annum, and that the extra day in each year is a holiday. Then in that case we work 2688 hours of a potential 5840 per year, that is that we are working or performing work-related tasks for 46% of our waking hours. That goes on for 45 years. Thus on these assumptions an average person devotes 120960 hours of their total waking adult life to work or work-related activities. But their total waking adult life adds up to 5840 x 65 = 379600 hours. In which case the percentage of their waking adult life that they have devoted to work will be only 32% of the total. So if you consider our lives *as wholes* it maybe that we are much closer to the Keynsian and Russellian ideal than it might at first appear.
Also thanks to LFC for linking to Quiggin’s excellent article.
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